Market Research Report : Facilities management services market in india 2013 sample

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Facilities Management Services Market IndiaFacilities Management Services Market – India

April 2013

SAMPLE Executive Summary

MarketGlobal market for Facilities Management Services is slated to reach ~‐ bn by the end of 2017

Facility management services can be broadly classified into e1 and e2

It is a highly fragmented industry with unorganized segment covering majority of the sectorIt is a highly fragmented industry with unorganized segment covering majority of the sector

Drivers–Boom in real estate

Challenges–Shortage of manpower

Drivers & Challenges

–Rise in infrastructural development–Growth in retail sector–Growth of hospitality sector– Improving healthcare scenario

g p

–Large unorganized segment

Trends

Standardization of proceduresFacilities management as a stream of study

Project management and general contracting services continuing to evolve Investments and M&A Activity in Facilities M S

Competitive Landscape

Mechanization of services Management Sector

Major Players

Company A Company B Company C

2FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT

LandscapeCompany D Company E Company F

•Macro‐Economic Indicators

I t d ti•Introduction

•Market Overview

T f C t t•Types of Contracts

•Drivers & Challenges

T d•Trends

•Industry Association

C i i L d•Competitive Landscape

•Strategic Recommendations

d

3

•Appendix

FACILITIES MANAGEMENT SERVICES MARKET IN INDIA 2013.PPT

SAMPLE Facilities management primarily ramifies into 2 major segments

Facilities Management Services

Hard Services Soft Servicess11 s12Hard Services Soft Services s11 s12

s1 s6

s2

s3

s7

s8s3

s4

s8

s9m

x

s5 s10

n

4

ny


•Macro‐Economic Indicators

I t d ti•Introduction

•Market Overview

T f C t t•Types of Contracts

•Drivers & Challenges

T d•Trends

•Industry Association

C i i L d•Competitive Landscape

•Strategic Recommendations

d


•Appendix

As companies delve into modernizing their business environment, facilities management services get a boost

Facilities Management Services Market – Global Overview

•Though sub‐prime crisis affected the sector badly, yet facilities management services continue to emerge as global economy looks to rise and corporate spending infrastructure becomes healthyglobal economy looks to rise and corporate spending infrastructure becomes healthy

• f1and f2 account for a major share of the global facilities management services market, while countries including f3, f4, f5, f6 hold the key to future growth

•Technical services in the likes of mechanical engineering and energy management emerge as the most popular segment in this marketsegment in this market

•Private equity investments have been looming large in the sector owing to its ability to generate high recurring revenues

Facilities Management Market – Growth

a4a3 xxxxxxxx

a1

2

xxxxxxxxx

6

a2


Facilities management services market is poised for strong growth in the ensuing years

Facilities Management Services Market Market Size and Growth• Facilities management services market in India has been growing steadily over the years and is set to i id h h fi

INR bn

b6witness rapid growth over the next five years

• It is a highly fragmented industry with few organized players and mostly unorganized small operators

• Facilities management business is largely d d d l

b7b6

b5b4

b3b2

b1unorganized in India and operates on low margins

• Consolidation in this segment is slowly gaining momentum as players are growing their business by acquiring smaller firms

l l

0

2017e2016e2015e2014e2013e2012

• Facilities management services are primarily concentrated in and around metros with low penetration in tier II and tier III cities

• There is an increasing demand for such services as emphasis on urban development and modernisation

b8

10

emphasis on urban development and modernisation of office spaces are growing

• Consistent economic growth has led to a booming real estate sector in India, which will drive the growth of this market in the near future b9

b13b12

b11

7

of this market in the near future b9


SAMPLE A cost break‐up analysis reflects which input carries how much weightage in this sector

Facilities Management Services – Cost Break‐up

• Every facility management service provider needs three basic components to render services which make up the costs involved• Since it is a job requiring high‐end amalgamation of manpower and machinery, rendering service deem it necessary to have

INP j q g g g p y g y

proper training as well• These basic units are required in different proportions for fulfilling various operational objectives

X

UTS

• Xxxx• Xxxx• xxxx

e1 c6

c5

c4

• Xxx• Xxx• Xxx

e2

c3

c2

• Xxx• Xxxe3

c1

8

• Xxx• Xxx


SAMPLE A closer look reveals which type of contracts garner maximum takers

Facilities Management Services – Contract Segmentation

• In majority of cases, facility management service providers need to battle it out with other players for the contracts of different building or infrastructure

• These contracts are either doled out as a complete package of the entire services or broken down to small sub‐parts and given to service providers

• Each type has its own set of advantages and disadvantages which answers the query of why a particular has a greater adoption rate than the other

• Xxx d3Xxx

• Xxx

• xxxe4

d2

d4

• Xxx

• Xxx

• Xxxe5

d1


Drivers & Challenges – Summary

Drivers

Boom in real estate

Rise in infrastructural development

Challenges

Shortage of manpower

Growth in retail sector

Growth of hospitality sector

Large unorganized segment

Improving healthcare scenario


Development of infrastructural facilities across India…

Rise in infrastructural development (1/4)

• Backed by strong economic growth, the infrastructure development in India has been growing consistently over the last few years

Impact

•Government has been increasingly focusing on investing in infrastructural facilities such as roads, railways, ports, airports and metro rail

• Development of infrastructural facilities such as metro rail and airports have increased the demand for facilities management services, as these projects require consistent maintenance

f di h d f i h d l d d i i f i• Government of India has started focusing on the development and modernization of airport infrastructure and plans to invest INR 2 tr in metro rail system in the next 10 years

• Development of airport and metro rail infrastructure will translate into substantial business for facilities management market in India

Investments in Infrastructure in the 12th Plan (2012‐17)

xxxxxxxxxINR trk2

0

k1

11

0

2012‐17e2007‐12


SAMPLE … in areas of metro rail development plan or …


Union Budget Grant for Delhi MetroGovernment Allocation in Metro Rail (2013‐14)

i1INR bn INR bn

i5i4

Bangalore

i3

Chennai

i2

Delhi

0 0.0

2013‐142012‐13

• Delhi Metro Rail Corporation has been allocated a major share of the Budget 2012‐13 allocations to the Urban Development Ministry for investments in

• Delhi Metro was allocated INR i7 bn in the Union

BangaloreChennaiDelhi 2013‐142012‐13

the Urban Development Ministry for investments in Metro corporations across India

• The ministry has got a substantial hike of INR i6 bn for construction and extension of the Metro network in Delhi, Bangalore, Kolkata, Chennai, Mumbai, Jaipur and Kochi

Budget 2013‐14• This amount is slated to be spent on construction of Phase – III in order to lay another i8 km of tracks in the national capital

12

, p


SAMPLE … airport infrastructural development plan …


Cargo in India – Growth (2012‐17) Investments in Airport in 11th Plan

INR bn

h6h5h4

h3h2h1

%

h8h7

0

Total Investment

CNS‐ATM and

Equipment

NE Airports

Greenfield Airports

Non‐Metro Airports

Metro Airports

0

InternationalDomestic

• This growth in cargo traffic will necessitate investments in specialized terminals and equipment which will further capitalize into opportunities for

Passenger Traffic in Airports – Growth

mnh10

which will further capitalize into opportunities for facilities management services providers

• Moreover, policies are drafted to facilitate the process of infrastructural development in the likes of allowing 100% foreign direct investment for green field airports via automatic route

h9

13

g p0

2017e2012


Trends – Summary

Standardization of procedures

Facilities management as a stream of study

` Mechanization of servicesKey Trends

Project management and general contracting services continuing to evolveProject management and general contracting services continuing to evolve

14

Investments and M&A Activity in Facilities Management Sector


SAMPLE As an effort to overcome manual shortcomings, players are focusing on mechanization of services

• Facilities management services have witnessed the rise of mechanization in its offerings• Increasing number of companies have now started to include mechanized services in their services portfolio

Mechanization of services

• Increasing number of companies have now started to include mechanized services in their services portfolio• One of the main reasons why mechanization has taken this sector by a storm is because of the fact that manual services were loaded with more faults and defects

• Overcoming them and devising a full proof solution led to the emergence of high adoption of mechanized versions of services by the majors

•xxx •xxx

•xxx •xxx

15

• Xxx• xxx


SAMPLE … in the facilities management services sector reflecting its potential to grow even further

Investments and M&A Activity in Facilities Management Sector (2/2)

M&A activity in Facilities Management Services

Year Buyer Target Deal Size (INR mn)

2013 yy zz ‐

2013 yy zz ‐

2012 yy zz ‐

2012 yy zz ‐

2010 yy zz ‐

2009 yy zz ‐

2009 yy zz ‐

2009 yy zz ‐


Trade Association – Indian Facility Management Association

Overview

IFMAIFMA

Benefits Membershipe be s p


SAMPLE … sector, yet presence of industry body defines ...

Overview

Indian Facility Management Association (2/3)

• Its list of Board of directors include leading names form the facility management fraternity in the likes

• Leading players have already registered itself under this association in the likes of

of u1, u2, u3 u4, u5, u6

Membership

•Membership to this national association results in i f i i hi fi ld b h f

•Different categories in this segment are Corporate Member – Annual membership fee is

opening up of various avenues in this field both for amateurs as well as for experienced professionals

•There are different types of memberships provided that professionals and organizations can choose from depending on qualifications, experience and

Corporate Member Annual membership fee is INR ‐ Professional Member – Annual membership fee is INR ‐ Associate Member – Annual membership fee is INR ‐

18

p g q , pexpertise Student Member – Annual membership fee is

INR ‐


SAMPLE Public: Foreign Company – Company A (1/4)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Gurgaon

Products and Services

Stock Exchange

Head Office

Key People


Category Products/Services

Soft Services P1,p2N D i ti

Hard Services P3,p4

Name Designation

xx MD (Facility Management ‐Americas)

xxMD (Integrated Facilities Management ‐Asia Pacific)

19

Others P5,p6 xxSenior Business Development Director ‐Facilities Management


SAMPLE i i l S h K i

Public: Foreign Company – Company A (2/4)

Financial Snapshot Key Ratios

Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin ‐0.10 8.46% 8.56% 9.13% 6.60%

Net Profit/LossTotal Income

po

INR mnINR mn

Net Margin 0.68 5.26% 4.58% 5.26% ‐0.14%

Profit Before Tax Margin 0.85 7.03% 6.18% 6.96% 0.10%

Return on Equity 0.47 6.94% 6.47% 6.74% ‐0.18%

Return on Capital Employed 0.56 12.45% 11.89% 13.00% 8.18%

Return on Working Capital 415.22 ‐228.64% ‐643.86% ‐263.17% ‐105.57%

Return on Assets ‐0.12 7.69% 7.81% 7.97% 5.29%

0201220112010

n

2009

m

0

Financial Summary

• The company incurred a net profit of INR ‐mn in FY 2012, as compared to net profit of INR ‐mn in FY 2011

• The company reported total income of INR ‐mn in FY 2012, registering an increase of r1% over FY 2011

Return on Fixed Assets ‐2.99 124.31% 127.30% 134.41% 76.66%

Cost RatiosOperating costs (% of Sales) 0.06 91.49% 91.43% 90.87% 93.40%

Administration costs (% of Sales)

‐0.25 64.76% 65.02% 64.92% 65.46%

Interest costs (% of Sales) ‐0.10 0.89% 0.99% 1.57% 2.22%registering an increase of r1% over FY 2011

• The company earned an operating margin of r2% in FY 2012, a decrease of r3 percentage points over FY 2011

• The company reported debt to equity ratio of ‐ in FY 2012, a decrease of r4% over FY 2011

Interest costs (% of Sales) 0.10 0.89% 0.99% 1.57% 2.22%

Liquidity RatiosCurrent Ratio ‐5.47% 0.91 0.96 0.92 0.86

Cash Ratio ‐16.68% 0.25 0.30 0.33 0.22

Leverage RatiosDebt to Equity Ratio 4.86% 0.21 0.20 0.10 0.10

b i l iKey Financial Performance Indicators

Indicators Value (dd/mm/yyyy)Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

EPS (INR)

Debt to Capital Ratio 4.03% 0.17 0.16 0.09 0.09

Interest Coverage Ratio 10.24% 9.52 8.64 5.83 2.98

Efficiency RatiosFixed Asset Turnover ‐1.66% 14.60 14.85 14.72 11.61

Asset Turnover ‐0.84% 0.90 0.91 0.87 0.80

Current Asset Turnover ‐5.82% 2.60 2.76 2.45 2.64

20

EPS (INR) ‐PE Ratio (Absolute) ‐

Working Capital Turnover 64.24% ‐26.86 ‐75.10 ‐28.83 ‐15.99

Capital Employed Turnover ‐7.72% 1.09 1.18 1.17 1.16

Improved Decline


SAMPLE Public: Foreign Company – Company A (3/4)

Key Business Segments Key Geographic Segments

10

r9

r8r7r6

r14

r13

r12

r11

r10

Business Highlights

20122011201020090%

2011 r15

r14

Description News

Overview • r16 provides integrated real estate and investment management services to owner, occupier, and investor clients worldwide

Collaborations • It has recently merged with international property consultancy r17 for a consideration of ~r18, with all Collaborations r19 offices and businesses across Europe operating under r19

Clientele • Its clientele in India includes r20,r21,r22

Awards and Recognition• Bagged the Award 1 in 2011

• It was also awarded the Award 2 in 2008, 2009 and 2011

21

It was also awarded the Award 2 in 2008, 2009 and 2011


SAMPLE Public: Foreign Company – Company A – SWOT Analysis (4/4)

SWTO

• Xxx• Xxx

• Xxx

• Xxx• xxx • Xxx

• Xxx

• Xxx

• Xxx

• Xxx

• Xxx• Xxx• Xxx


SAMPLE Private: Domestic Company – Company B (1/4)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Gurgaon


Year of Incorporation

Head Office

Key People


N D i ti

Category Products/Services

Engineering P1,p2

Soft Services P3,p4Name Designation

xx MD

xx Director

xx Director

,p

Business Support P5,p6

23

xx Director


SAMPLE Company B – Shareholding Pattern

Shareholders of the Company Ownership Structure

Name No. of Shares held r5r4 r6

xx a1

xx a2 r2 r3

xx a3

xx a4

xx a5xx a5

xx a6

xx a7r1

xx a8

r1

24

Total a9

SAMPLE i i l S h K i

Private: Domestic Company – Company B (2/4)

Financial Snapshot Key Ratios

Particulars y‐o‐y change (2011‐10)

2011 2010 2009

Profitability RatiosOperating Margin 1.50 8.81% 7.31% 6.17%

Net Profit/LossTotal Income

P3INR mnINR mn

Net Margin 0.60 4.42% 3.82% 3.81%

Profit Before Tax Margin 0.57 6.69% 6.11% 6.08%

Return on Equity ‐6.71 10.63% 17.34% 94.96%

Return on Capital Employed ‐4.00 13.73% 17.73% 80.93%

Return on Working Capital 3.25 26.06% 22.81% 33.30%

Return on Assets ‐3.89 13.84% 17.73% 19.38%

P1P2

P3

Return on Fixed Assets 23.49 103.12% 79.63% 46.47%

Cost RatiosOperating costs (% of Sales) ‐1.50 91.19% 92.69% 93.81%

Administration costs (% of Sales) N.A. N.A. N.A. N.A.

Interest costs (% of Sales) 0.92 2.12% 1.20% 0.37%Financial Summary

20‐‐

0

20‐‐ 20‐‐

0

Interest costs (% of Sales) 0.92 2.12% 1.20% 0.37%

Liquidity RatiosCurrent Ratio ‐5.58% 2.96 3.14 1.78

Cash Ratio 2326.55% 1.25 0.05 0.07

Leverage RatiosDebt to Equity Ratio ‐37.94% 0.54 0.87 0.90

b i l i

• The company incurred a net profit of INR ‐mn in FY 2011, as compared to net profit of INR ‐mn in FY 2010

• The company reported total income of INR ‐mn in FY 2011, registering an increase of q1% over FY 2010

Debt to Capital Ratio ‐24.61% 0.35 0.47 0.47

Interest Coverage Ratio ‐31.97% 4.15 6.11 16.71

Efficiency RatiosFixed Asset Turnover 7.48% 11.71 10.89 7.51

Asset Turnover ‐35.22% 1.57 2.43 3.13

Current Asset Turnover ‐7.80% 1.96 2.13 2.35

• The company earned an operating margin of q2% in FY 2011, an increase of 1.50 percentage points over FY 2010

• The company reported debt to equity ratio of ‐ in FY 2011, a decrease of q3% over FY 2010

25

Working Capital Turnover ‐5.18% 2.96 3.12 5.38

Capital Employed Turnover ‐47.09% 2.40 4.54 24.87

Improved Decline


SAMPLE Private: Domestic Company – Company B (3/4)

Business Highlights

Description News

• g1 is a subsidiary of g2 with pan India presence spanning across all metros tier 2 tier 3 and even tier 4

Overview

• g1 is a subsidiary of g2 with pan India presence spanning across all metros, tier‐2, tier‐3 and even tier‐4

cities

• It has over g3employees and is one of the top facility management service companies in India, servicing

sectors like BFSI, retail, corporate, airports, ITES, government, telecom and diplomatic missions

Clientele

• Its clientele includes g4, g5, g6, g7

• Additionally, its clients also include government organizations like Indian Railways, BCCI, Delhi Metro and

diplomatic organizations like the Singapore High Commission

Alliances• As part of its expansion and consolidation drive, it has recently acquired a strategic stake in g8, which will

Alliancesalso help to expand its client base

Awards and Recognitions • It was the first FMS ISO 9001 certified company and has also achieved ESCO Certification in 2010


SAMPLE Private: Domestic Company – Company B – SWOT Analysis (4/4)

• Xxxx• Xxxx

• Xxx

• Xxx• Xxxx• Xxx

• Xxx

S W

TO • Xxx

• Xxx

• xxx

• Xxx• Xxx• Xxx• xxx


Thank you for the attention

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